Spencer v. Jameson
| Decision Date | 16 June 2009 |
| Docket Number | No. 34517.,34517. |
| Citation | 211 P.3d 106,147 Idaho 497 |
| Parties | Lawrence SPENCER, Plaintiff-Appellant, v. Dee JAMESON, an individual, Davidson Trust Co., Custodian for IRA/SEP Account No. 68-0811-30, and James A. Raeon, Successor Trustee, Defendants-Respondents. |
| Court | Idaho Supreme Court |
This case arises out of two non-judicial foreclosure sales for separate but related deeds of trust. Appellant Lawrence Spencer appeals from the district court's order of summary judgment in favor of Respondent Davidson Trust Company, custodian for IRA/SEP account No. 68-0811-30 and James Raeon, successor trustee (Davidson Trust); and Respondent Dee Jameson, the trust beneficiary. We reverse the district court's award of summary judgment and remand for a determination of the amount of sale proceeds to be distributed along with who is entitled to such proceeds under Idaho Code § 45-1507.
On April 30, 2002, Spencer executed a promissory note for $90,000 in favor of Davidson Trust. The note was secured by a Deed of Trust (DOT No. 1) on Spencer's real property Parcels Nos. 1, 2, and 3. Parcel No. 3 also included title to a 1981 Skyline mobile home, VIN # 01910302P. A few months later on November 13, 2002, Spencer entered into a Loan Commitment Agreement (Agreement) with Davidson Trust for a proposed loan in the amount of $65,000. The Agreement provided that the loan was to be secured by Parcel No. 3 along with title to a 1977 mobile home, VIN #73165.1 The Agreement also provided that $42,500 of the $65,000 was to be withheld from Spencer and paid to him incrementally upon completion of several tasks and improvements related to the mobile home. On November 14, 2002, Spencer executed a promissory note for $65,000 in favor of Davidson Trust for the second loan. The following day on November 15, 2002, Spencer executed a Deed of Trust (DOT No. 2) as security for the second note. DOT No. 2 conveyed Parcel No. 3 by description, but made no reference to the 1977 mobile home, or the Agreement itself.
Between November 2002 and March 2004, Spencer completed six of the seven items set forth in the Agreement. It is undisputed that Spencer failed to complete item (g), which held back $5,000 pending the completion of certain improvements entitled "[m]obile remodel costs." These improvements included "windows, carpets, drywall, etc. (to be paid upon completion)." Because Spencer did not complete item (g), he was only distributed $60,000 of loan proceeds for the second loan.
Spencer later defaulted on his repayment obligations under both Deeds of Trust. On February 24, 2005, the trustee sold the deeds at two separate non-judicial foreclosure sales. It is undisputed that Spencer received proper notice for both sales. The sale of DOT No. 2 was conducted first at 10:00 a.m. Spencer did not attend this sale. Davidson Trust submitted a credit bid of $86,507.45, which included the $5,000 of loan proceeds withheld under item (g) of the Agreement. This was the highest bid and Davidson Trust was given a Trustee's Deed to Parcel No. 3. The sale of DOT No. 1 was conducted next at 10:30 a.m. Spencer did attend this sale and bid $10 for the mobile home. Davidson Trust submitted a credit bid in the amount of $204,074.37, which Davidson Trust calculated as being the cumulative amount owing under both deeds of trust. Davidson Trust submitted the highest bid and was given a Trustee's Deed to Parcels Nos. 1, 2, and 3 and title to the 1981 Skyline mobile home.
The Trustee's Deed for DOT No. 2 was recorded first at 11:29 a.m. and the Trustee's Deed for DOT No. 1 was recorded second at 11:30 a.m. The Trustee's Deed for the sale of DOT No. 1 listed the 1981 Skyline mobile home as part of the property sold; the Trustee's Deed for the sale of DOT No. 2 did not include any reference to a mobile home. The trustee subsequently executed an Amended Trustee's Deed on March 23, 2005 for DOT No. 1, which conveyed all three parcels and title to the 1981 Skyline mobile home as being the property secured under both Deeds of Trust.
On April 27, 2006, approximately fourteen months after the sales, Spencer filed suit against Jameson and Davidson Trust, claiming irregularities in both non-judicial foreclosure sales. Spencer sought a declaratory judgment to set aside and reschedule the sales. In the alternative, Spencer argued that a monetary surplus was owed to him under I.C. § 45-1507.
On November 3, 2006, Jameson moved for summary judgment, which Davidson Trust joined. The district court granted summary judgment in favor of the respondents. Spencer filed a motion for clarification and reconsideration, which the district court denied. Spencer now appeals from the district court's order of summary judgment.
When reviewing an order for summary judgment, this Court applies the same standard of review as was used by the trial court in ruling on the motion for summary judgment. See Cristo Viene Pentecostal Church v. Paz, 144 Idaho 304, 307, 160 P.3d 743, 746 (2007). Summary judgment is proper if "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). "If there is no genuine issue of material fact, only a question of law remains, over which this Court exercises free review." Cristo, 144 Idaho at 307, 160 P.3d at 746 (quoting Infanger v. City of Salmon, 137 Idaho 45, 47, 44 P.3d 1100, 1102 (2002)).
This Court liberally construes all disputed facts in favor of the nonmoving party, and all reasonable inferences drawn from the record will be drawn in favor of the nonmoving party. Id. If reasonable persons could reach differing conclusions or draw conflicting inferences from the evidence presented, then summary judgment is improper. McPheters v. Maile, 138 Idaho 391, 394, 64 P.3d 317, 320 (2003).
On appeal, Spencer claims the district court erred in granting summary judgment to the respondents. First, Spencer argues that the character of the 1981 Skyline mobile home is personal property rather than real property and, therefore, the mobile home was improperly transferred to the trustee for purposes of non-judicial foreclosure under I.C. § 45-1501, et seq.2 In addition, Spencer argues the sales should be set aside pursuant to I.C. § 45-1508 because Davidson Trust submitted bids in excess of the amounts he owed under the notes secured by the trust deeds. Alternatively, Spencer argues that he is entitled to surplus proceeds from the sales under I.C. § 45-1507. Each argument will be discussed in turn.
Spencer argues that the character of the 1981 Skyline mobile home is personal property rather than real property and, therefore, the mobile home was not subject to foreclosure. Before addressing Spencer's argument, we find it necessary to clarify why this issue is pertinent to the case. Upon manufacture, a mobile home is a movable chattel and characterized as personal property. Once a mobile home is affixed to land it is converted to real property. See I.C. § 55-101. Accordingly, a mobile home may be considered either real property or personal property under Idaho law. However, a deed of trust, by definition, is limited to the conveyance of real property. I.C. § 45-1502(3). Thus, we must determine whether at the time of the sale the 1981 Skyline mobile home was converted to real property and, therefore, was properly transferred to the trustee for purposes of non-judicial foreclosure under I.C. § 45-1503; or whether the mobile remained personal property, in which case the mobile home was not subject to foreclosure under the statute.
The Idaho Legislature has defined "real property" under Title 55, Chapter 1 which governs property and ownership, as follows:
1. Lands, possessory rights to land, ditch and water rights, and mining claims, both load and placer.
2. That which is affixed to land.
3. That which is appurtenant to land.
I.C. § 55-101. As set forth above, a deed of trust is limited to the conveyance of real property. See I.C. § 45-1502(3). Accordingly, that which is land, affixed to the land, or appurtenant to the land, and falls within the parameters of the real property described in the deed, is conveyed under the deed of trust. Idaho Code § 45-1502(5) provides additional limitations on what real property can be transferred to the trustee for purposes of non-judicial foreclosure. In this case, the question is whether the 1981 Skyline mobile home was affixed to the real property described as Parcel No. 3 in DOT No. 1 and DOT No. 2 at the time of the sale. When faced with the issue of fixture, we apply three general tests: "(1) Actual or constructive annexation to the realty; (2) Appropriation to the use of that part of the realty to which it is connected; [and] (3) Intention of the party so annexing to make the article a permanent accession to the realty." Prudente v. Nechanicky, 84 Idaho 42, 47, 367 P.2d 568, 570-71 (1961).
The evidence demonstrates that the 1981 Skyline mobile home was affixed to the land at the time of sale and, therefore, was converted to real property. See I.C. § 55-101. As set forth in Ed Jameson's affidavit dated November 3, 2006, Spencer completed items (a) through (f) in the Agreement related to the mobile home, which were: (a) well set-up, with pump, pressure tanks, lines; (b) septic system with inspections, and hookup to home; (c) driveway completion to county standards; (d) power lines and pedestal, with inspections and...
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